Consolidated Statement of Cash Flows
Not what you're looking for?
1. (TCO 3) On January 1, 2009, Race Corp. acquired 80% of the voting common stock of Gallow Inc. During the year, Race sold to Gallow for $450,000 goods which cost $330,000. Gallow still owned 15% of the goods at year-end. Gallow's reported net income was $204,000 and Race's net income was $806,000. Race decided to use the equity method to account for this investment. What was the non-controlling interest's share of consolidated net income?
$37,200
$22,800
$30,900
$32,900
$40,800
2. (TCO 3) Where do dividends paid by a subsidiary to the parent company appear on a consolidated statement of cash flows? (
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Supplemental schedule of non-cash investing and financing activities
They do not appear on the consolidated statement of cash flows
3. (TCO 3) Keenan Company has had bonds payable of $20,000 outstanding for several years. On January 1, 2009, when there was an unamortized premium of $2,000 with a remaining life of 10 years, Keenan's parent, Ross, Inc., purchased the bonds in the open market for $19,000. Keenan is a 90% owned subsidiary of Ross. The bonds pay 8% interest annually on December 31. The companies use the straight-line method to amortize interest revenue and expense. Compute the consolidated gain or loss on a consolidated income statement for 2009.
$3,000 gain
$3,000 loss
$1,000 gain
$1,000 loss
$2,000 gain
4. (TCO 3) Using the indirect method, where does the decrease in accounts receivable appear on a consolidated statement of cash flows?
$8,000 increase to net income as an operating activity
$8,000 decrease to net income as an operating activity
$6,400 increase to net income as an operating activity
$6,400 decrease to net income as an operating activity
$8,000 increase as an investing activity
5. (TCO 3) Stevens Company has had bonds payable of $10,000 outstanding for several years. On January 1, 2009, when there was an unamortized discount of $2,000 and a remaining life of 5 years. Its 80% owned subsidiary, Matthews Company, purchased the bonds in the open market for $11,000. The bonds pay 6% interest annually on December 31. The companies use the straight-line method to amortize interest revenue and expense. Compute the consolidated gain or loss on a consolidated income statement for 2009.
$1,000 gain
$1,000 loss
$2,000 loss
$3,000 loss
$3,000 gain
Purchase this Solution
Solution Summary
This solution includes responses to a set of mutliple choice questions that are based on consolidated income statement and consolidated cash flow statements.
Solution Preview
Hello Student,
In order to answer the first question, you may want to remind yourself from the last response given that whenever a sale is made from a parent to a subsidiary, referred to as a downstream sale, any gain or loss on the transfer normally accrues to the stockholders of the parent company. Also, at ...
Purchase this Solution
Free BrainMass Quizzes
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Introduction to Finance
This quiz test introductory finance topics.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.